posted on October 7, 2000 02:46:05 PM
thanks sg52: the ex-NSA guy was referring to any fraudulent use of a credit card, and believe me, it wouldn't take professional hackers long to use a cc NUMBER in a whole variety of manners online, without ever making one single retail purchase, lol, and get a whole buncha mooooo-laH. I wish I remembered his name and more of the interview -- the only things that made truly permanent synapses were that ONE TRILLION DOLLAR figure, which the interviewer IMMEDIATELY jumped on and asked repetitively about, and also that all of this was all information that your friendly cc company and wonderful government do NOT want YOU, the public, to know about, as they both desperately want ecommerce to flourish, and NOTHING to upset anybody about safety & security online, LOL.
Here is an article about cc fraud, specifically in regards to e-tail transactions:
UpsideToday Ebiz:
Fraud part of life for online retailers
September 28, 2000 12:00 AM PT
by Matt Berger
Note: A THREE PAGE STORY RE:
"$230 million lost to fraudulent charges made to ecommerce sites, which represents 1.2% of all online sales"
posted on October 7, 2000 03:22:37 PM
You know, I've been scratching my head over this one for awhile, but until sg52 piped up I thought it was just my imagination.
Where, exactly, is the "money laundering" going on in this scenario?
Is what "clueless" did any different from selling items on consignment that weren't in her possession (dumb, for sure) at an agreed-upon commission? And then, when the deal goes sour, she's stuck with the chargeback and its repercussions?
posted on October 7, 2000 03:52:41 PM
I'd also like to know how members of an alleged "money laundering" ring were able to access so many PayPal accounts or to set up so many fake PayPal accounts to launder money?
posted on October 7, 2000 05:46:46 PM
vargas~ There is only one PayPal account involved.
Take a look over there now. Clueless has written out her whole story filling in what seems to be most of the questions involved. Including... the total amount involved of nearly $20,000!
And in other news, names, addresses, and phone numbers of the Romanians who received Western Union wires have been rooted out and posted!!!
posted on October 7, 2000 06:14:17 PM
There were lots of Paypal accounts being used to send money to this user, all of which were linked to Yahoo e-mail addresses.
That fact alone (the Yahoo link) is a pretty clear indication that the Romanian was not selling any product, and that all of the accounts were either his, or those of his associates.
The typical scam would be to use stolen credit card numbers to fund the Paypal account, send the money to a U.S. intermediary, who would send it to Romania. The Romanian gets the cash, and the credit card companies/Paypal/intermediary have no effective recourse.
"Money laundering" doesn't seem too likely to me, though the possibility that she was being used by organized crime to smuggle illicit funds out of the country had occurred to me. (Apparently drug cartels have been using lots of small USPS money orders to move cash into Canada without catching the notice of the authorities.)
However, sending almost $20 grand in a one-month period from one person in the U.S. to one person in Romania is almost guaranteed to get attention, so I think a money laundering or currency law violation is unlikely. Currency smugglers would use lots more intermediaries and much smaller amounts to avoid detection.
posted on October 7, 2000 06:16:07 PM
Well, I read the latest and I must be missing something. What about all of the "buyer" PayPal accounts who made payments into Clueless' account? Were there separate accounts for all of these "people" or just several e-mail addresses attached to one PayPal account? If it's the latter, PayPal needs some new bells, whistles and alarms!
posted on October 8, 2000 02:20:04 AM
Add me to the list of those who think Damon's lost all credibility. I understand that he's restrained by his inability to say anything that he's not allowed to say, because he works for PayPal. And it appears that he did not realize what had happened until he communicated with the woman on the OTWA board. But I think that he could have either found out sooner or at least not have made statements that now turn out to be less than the total truth. I think if we're expected to believe that Damon's statements have the weight and authority of PayPal behind them, he ought to at least investigate what is really going on at PayPal before he makes any statements that are incomplete for the truth about the subject at hand.
Statements of truth, when leaving out other relevent statements of truth, can be considered lies, especially when they leave out the part that's important to the discussion at hand. For instance, a "No!" response to "Did you kill your wife last Thursday night?" would be considered a lie if the truth is "I killed her last Friday morning."
Naturally we're concerned about whether or not the statements made by a woman on the OTWA board, about PayPay withdrawing money from her bank account without her permission, are true.
Damon repeatedly assured us in this thread that PayPal would not withdraw money from a user's bank account, (1) without the customer's permission or (2) without a court order in the event of fraud or other legal means. (See: PayPalDamon's posts in
this thread: 10-06-00 01:57:52 PM, 10-06-00 02:36:43 PM, 10-06-00 02:50:48 PM, 10-06-00 03:39:19 PM.)
Eventually, after his discussion with the woman on the OTWA board, Damon posted this in this thread: "Generally, I am at a disadvantage because I can't discuss account specifics in a public forum... When fraud occurs, we will place a request to stop the item from leaving our system."
Posted by PayPalDamon on 10-06-00 06:17:27 PM
I can't help but think of things like Shirley MacLaine's line in "Terms of Endearment":
"And they let you get away with that!?"
It appears from the posts on the OTWA board, that there were two deposits made on 09-05-00 ($971.87 and $960.00), the first of which was withdrawn from the woman's bank account on 10-04-00 by PayPal, and an attempt was made to withdraw the second payment, but that payment was not returned to PayPal because the woman's bank account did not have sufficient funds to withdraw it. Damon's posts claim the withdrawals were reversals of deposits or stop orders issued earlier.
See: Post by Jshumko 10-06-00 04:36 PM, http://otwa.honesty.com/forums/Forum16/HTML/000877.html
Damon, you were asked point-blank about this, and the subject of this thread is about this. Yet you felt okay about posting numerous denials of it, without verifying what really happened? You work for PayPal, surely you have access to the information that was asked for repeatedly in this thread, yet you did not investigate the woman's claims until after you had posted here that PayPal would not do what she was claiming it had done.
I am glad that we finally found out that PayPal will reverse deposits made, without the customer's permission and without a court order. I think it would have been better to have been told the truth a lot sooner and without all this effort to find out the truth. PayPal's customers have a right to be concerned and a right to know the truth.
Tessa
http://bookdealers.home.mindspring.com
[ edited by Bookdealers on Oct 8, 2000 02:24 AM ]
[ edited by Bookdealers on Oct 8, 2000 02:34 AM ]
posted on October 8, 2000 02:43:57 AM
[b]Once money has left our system and cleared into a bank account we can't access it.
The customer would have to give us permission to do so or it would have to be released by court order.
We can only control transactions while money is in our system.[/b]
Well, that sounds pretty clear to me. But apparently PayPal managed to get funds out of a user's checking account, somehow, a month after they "left (their) system." And they are in no hurry to return it.
This isn't the first time that PayPal, and Damon, have played fast and loose with the truth. Perhaps now they will blame the user's bank for processing their ACH reversal too slowly? Puleeez.
There is legal recourse for situations when a company believes that it is owed money by an individual. Legal recourse would involve a court. In this case, PayPal apparently just decided that it was owed funds in a user's non-X.com checking account, and took the money. Least that's how it looks from here.
And to make matters worse, they obfuscate and make it appear (wink wink) that they must have had a court order to obtain the funds- but they conveniently cannot discuss specific cases- so folks are left to assume that the reason Damon brings up court orders is because it is relevant to this case. Sheez.
posted on October 8, 2000 03:32:22 AM
I have read both threads and here is what I think, the lady who this happened to is either a total moron or a con artist herself. If you are dishonest, sure something like this could happen, if not we have nothing to worry about.
Anyone with some sense can see that her story has some serious huge holes in it, none of her dates match for one thing. Paypal did not take the money from her account, they did a stop payment, or reversal, on her withdrawls, there is a big difference. She and her Romanian friends managed to take Paypal for over $20,000, but she is to be felt sorry for? She is not getting any sympathy from me, people like her are probably one of the biggest reasons why we are now paying fees. Paypal cannot tell their side of the story, how do we know there is not a serious criminal investigation going on here? How do we know there has not been a court order, I agree with the poster on the other board who said these type things are not usually made known to the person under investigation.
I actually feel a little sorry for Paypal, and especially for Damon, here is someone making all these wild accusations and they have no way to defend themselves other than to quote TOS. Does everyone believe everything they hear? Heather
posted on October 8, 2000 04:06:09 AM
Heather: I agree. We do not know the truth about anything on this incident. We only have what the woman says, and what
Damon has posted with his disclaimers.
I find it hard to have sympathy for someone who's only claim to innocence is ignorance. Ignorance is no defense for criminal
activities. Also, no one uses PayPal without agreeing to its Terms of Service, which forbid what she admits to having done.
I could understand a child not knowing that something was wrong with doing what she did. I assume that she is an adult, so I
think she's going to be in serious legal trouble and will need a lawyer. I think her lawyer's going to have a difficult time
defending her, because of all the statements of self-incrimination that she's made on public boards.
I know that the federal government requires banks and escrow agents, among others, to report all deposits of $10,000.00 (or
is it less now?), so that they can catch money-laundering and other criminal activities (like failure to pay taxes). So I would expect that several federal investigative agencies will be investigating (FBI, Secret Service, etc.). I suspect too that Western Union may have reported the transfers of money, maybe they are required by law to do so.
By the way, I looked up a definition for "money laundering." My dictionary does not have one, but I found one on the internet:
"Money laundering is the processing of criminal proceeds to disguise their illegal origin."
Here are links to several money-laundering sites on the internet. It seems that money-laundering is of interest to international investigative agencies:
http://www.ustreas.gov/fincen/
http://www.moneylaundering.com/
http://www.oecd.org/fatf/MLaundering_en.htm
From what the woman posted on the OTWA board, PayPal notified her that the transactions were fraudulent. I still don't understand what was fraudulent about the transactions, but I think it could be either (1) stolen credit cards were used; or (2) the transactions were done to obtain cash from the credit cards, instead of them being used to purchase items. The first offense is criminal. I don't know about the second one being criminal, but I do know that it's against PayPal Terms of Service and
forbidden by the credit-card companies which charge larger fees for cash withdrawals.
It does seem to me that the sending of almost $20,000.00 within one month to someone in a foreign country ought to have triggered some part of the woman's conscience that maybe that wasn't okay to do what she was doing. How many people do you know do $20,000.00 per month of transactions by credit-card payments from selling on the internet, and do not have the ability to accept credit cards? Duh!
At the very least, she has an amazing lack of realization that she needs to protect herself.
posted on October 8, 2000 04:12:51 AM" the lady who this happened to is either a total moron or a con artist herself"
She'd done some things that leads me to believe she's not a total moron. At one point she had set up her own message board for her complaints about PayPal holding her funds, (she closed that after a week of inactivity.) She did manage to set herself up as the "PayPal poster child victim" on OTWA, even though she managed to wheel and deal $20,000.00 from PayPal to Western Union Money Orders to an anonymous person in Romania.
When you purchase $20,000.00 worth of Money Orders in just over 2 weeks and send them to Romania you can't be totally clueless. Not only do I not have any sympathy for her I hope that they try and recover the rest of the money through any legal means at their disposal.
She's got a large inventory on Amazon's zShops 2,400+, I haven't looked at her auctions, but she can't be the moron she'd have us believe she is.
If there is a 'collection plate' passed around for this woman you can count me out.
posted on October 8, 2000 05:32:20 AM
RADH -
"NO professional experienced financial services company with professional experienced employees would EVER, not ever, oKay the potential laundering of funds to parties in Roumania."
You have apparently niot had many dealings with Western Union branches. They have dozens of outlets, mostly staffed with rejects from the burger-flipping industry.
posted on October 8, 2000 05:56:46 AM
uaru and Bookdealers: No, she probably is not a moron, she conned a lot of people with her story and garnered much sympathy and support, I don't see how though. One of the earliest posters in this thread hit it head on: The sky is falling, the sky is falling! People are looking for an excuse to blame Paypal for virtually everything, no matter what bandwagon comes up, people are jumping on it.
I, for one, hope to see Paypal sue the snot out of her to recover the rest of the funds, someone has to take the fall. Even if, God forbd she was not that stupid, she did not see soemthing wrong from the beginning, she still let incontrollable greed get to her.
She has stated that she was doing a good deed for someone. Did all of you see that list of Yahoo addresses she posted? I saw something strange about that right off, and she missed it? I won't ne passing a collection plate for her either and I would hate to be in her shoes right now. Heather
[ edited by hcross on Oct 8, 2000 06:04 AM ]
posted on October 8, 2000 06:38:21 AM
Magazine_guy~ I think the key about the money has a lot to do with
1) the user KNEW that these funds were "reversed" from when she saw her account at the beginning of September. She's stated that 1 set of funds were placed on hold, and 2 more transactions were "reversed" and she gave the dates of these actions
PayPal froze my account the second time on Aug. 31. I had three withdrawal requests in place. One request was put “on hold”; the other two were “reversed”.. In one of her other posts/threads she mentiones the exact dates that these actions were taken. So, to me, it's OBVIOUS that she knew about it, at the time it was happening.
2) Please read KateArtist post, in this forum, about ACH transactions.
A reversal is defined by these guidelines as 'Any ACH entries (single transaction) or files sent within required deadlines or reverse previously originated erroneous entries or files.'
The reversal orders were put in on, or about, 9/1. I believe that's a reasonable amount of time, seeing as the PP user states the funds hit her account on 9/5.. It's apparent to me, the funds were in transit at the time the holds were coded as a "reverse".
3) As to "why" the reverse did not go through when it was requested.. ? That is a very good question! It could be error on the part of PP, the ACH, or, even the bank. No one of us can place blame for that solely upon PP. The PP user says she called her bank about this, however, in my book this user has a track record of not asking all the right questions, so the responses she may have gotten from her bank are most likely, not accurate.
As far as the inuendo about the court order.. I will have to go back, and read everything that PPD was asked and how he answered it. As Bookdealers pointed out, sometimes the truth is only as good as the questions you are being asked............. Therefore, I think that maybe the wrong questions were being asked. Ya know?
Duh! Yes, there were a bunch of PayPal accounts in use. My mistake. She only had one, they had many...
I wonder how many other PayPal user/marks are involved in this? I have some doubts that she is the only one they had on the hook with this. It could be MUCH bigger.
posted on October 8, 2000 08:41:28 AM
This whole story, whether it's true or not, should be a real warning to sellers of higher-end goods who accept PayPal.
Look how easy it is is to set up a PayPal account and start buying. Even the new $250 spending limit for new enrollees can come back to bite some honest seller in the rear.
All it takes is 50 to 100 stolen credit card numbers to run up $12,500 to $25,000 in fraudulent purchases during the Christmas selling season. Seller or sellers ship goods, thief or thieves sell 'em on the street at a deep discount, cards are reported stolen. Guess who is left holding the bag?
Then the victimized seller can come here for help and we can call him or her a "complete moron" without knowing all of the facts.
Edited for typo
[ edited by vargas on Oct 8, 2000 09:49 AM ]
posted on October 8, 2000 08:42:28 AM
Rosie,
I could easily see that a reversal may take some time to process if the bank originally kicked it back to PayPal with a denial requiring PayPal to come up with some proof that they should be allowed to reverse the transaction.
Essentially all this is between PayPal and the bank - whatever agreement they come to and the bank can set up the type of transaction to whatever they want. The customer should be questioning the bank as to why they allowed this late reversal. If she is not satisfied with their answer, then there is the arbitration process.
posted on October 8, 2000 09:07:15 AM
abacaxi: accountants have always been trained and gleaned experience with recognizing suspicious-looking money flows. Nowadays, that kinda stuff is simply programmed in, and thus when peculiar activity is noted, it is brought to an investigator's notice very quickly. I suspect that Western Union auditors were very aware of this situation before the entire 14 days had transpired, as noted above, "When you purchase $20,000.00 worth of Money Orders in just over 2 weeks and send them to Romania..."
If my scenario has any validity whatsoever, then yes, legal authorities were called in immediately, and all legal authorities who deal with puter crimes always instruct any afflicted companies to NOT comment publically thereof.
I have NO idea of the FACTS of this situation. I have NO idea of any trait whatsoever of the individual whose account was closed, much less if she was knowingly or unknowingly entangled in illegal activity.
I have NO idea why you would suggest that people who flip burgers would be accountable for detecting suspicious financial activities which even the CPAs would rely on the computer to detect and spit out to them......
posted on October 8, 2000 09:26:54 AM"I have NO idea of the FACTS of this situation"
I don't know the whole story, but just by what the 'victim' has admitted to has got to be one of the most ridiculous scenarios I've read. Not even Jerry12 has ever surpassed this one.
posted on October 8, 2000 10:07:40 AM
radh and abacaxi --
Federal law requires reporting of cash transactions over $10,000, and prohibits structuring a cash transaction (by breaking it into smaller amounts) to avoid this reporting requirement.
Western Union MO's are bought with cash, and the name and address of sender/recipient are entered into their computer. A pattern of MOs totalling $20,000 in a few weeks with the same sender and recipient would be picked up as possible structuring, and would be reported as such to the feds (Treasury Dept? IRS?).
Western Union (other than the counter staff that the woman talked to, who are typically not W.U. employees and have minimal training in financial transactions) would have no way of knowing where the money came from, or any reason to suspect credit card fraud, as opposd to, say, drug smuggling. All they would suspect is a currency law violation.
To trace the funds back to Paypal, the feds would have to find the source of the cash she used to pay for the money orders (her bank account) and then find the source of deposits into that account (Paypal), then contact Paypal to find out the source of the funds she received.
That could have happened, of course, but somehow I have my doubts that the feds moved that fast.
I'd guess that Paypal learned of the scheme when the people whose credit cards had been stolen started filing chargebacks, not from a federal investigation initiated by a Western Union report.
The other option is that the feds were already onto other intermediaries being used by the Romanian, had begun tracking his activities, and located the woman (and Paypal) in that manner.
posted on October 8, 2000 11:08:51 AM
I wonder if this lady is the only one the Romanians have on the hook in this scheme. There may be 3 dozen others just like her out there that we don't know about.
posted on October 8, 2000 11:22:34 AM
Toyranch -
I would be VERY surprised if she is the only one. Usually the problem with stolen CC numbers is disposing of the goods - the scammer usually loses at least 50% of the transaction value. This scheme kicks back 85-90% of the fraudulent transaction value.
posted on October 8, 2000 11:58:07 AM
There was a post in one of the Usenet newsgroups (probably alt.marketing.online.ebay) a few months ago, recruiting people to process payments through their Paypal accounts. I don't recall the details, but I think the poster was from Eastern Europe or the former USSR. Perhaps it was George.
I forwarded it to Damon, and asked him to pass it along to their security department.
Several people posted responses on the newsgroup that this was almost certaiunly a fraudulent scheme.
posted on October 8, 2000 12:04:17 PM
I went back into my files and found a copy of that post. Here it is, with the e-mail address munged to prevent anyone from signing up. The ISP used is the one listed; the user's name included the word "austria", but there was no other indication of his location.
----BEGIN COPY OF NEWSGROUP POST----
If You have PayPal account and live in USA, i offer You
a great opportunity, i send you 2000 $ a day by e-mail payment offered
by PAYPAL and You send me by wire transfer only 1600.00 $ Yes this is
correct you can gain immediately 400$ a day, 16.000 $ a month.
If You are interested in this offer please contact me urgently.
posted on October 8, 2000 12:04:50 PM
Yep Abacaxi...
That's what I was thinking.
This could be a whole lot more than $20k.
Heck, I could scam a lot more than $20k off ebaY in less time and without credit card numbers if I were so inclined (and I am very much NOT inclined)... I'll bet it is a very MUCH bigger number.
And one more thing. This lady has used the chatboard in a way it is rarely ever used. She was powerless and clueless and was getting nowhere and now she has people tracking down the addresses of the people she sent money to and has all kinds of information and PayPal has been jerked up by the short hairs by her putting it all out on the board.
Think about HCQ and the Van Gogh painting or this... I wonder what will happen in a few years when people all over start to learn of the power they have with these companies through the chatboard medium on the internet?
One thing rings truer to me every day. Something someone in the OAI told me, someone I respect a great deal. We are all in bed together, nobody is ready to admit it. US (the community of users), the auction sites, the payment services, the service companies, AW, OTWA, everyone. We are all in one big bed together.
So much of this PayPal stuff sounds like it too! 'Hey PayPal, stop eating crackers in bed' 'Oh, don't bother PayPal, he kisses so good' 'PayPal is not wearing a condom!!' 'ebaY is hogging the bed!' 'ebaY wants to get paid another buck for services' 'Ohh ebaY, you give good customer' and on and on it goes. We are all in bed together, and we move to different sides of the bed all the time. PayPal may be in the bed, but I'm going to make sure PayPal is waaaay on the other side of the bed from me. If someone else wants to snuggle up next to PayPal, fine by me, I'm not jealous!
posted on October 8, 2000 12:32:14 PM
Toyranch: I think it's quite possible that the woman is not the only one involved. As reported by others, others have received
similar offers or seen them posted on the internet.
I suspect a big reason why this woman received so much sympathy and support is quite possibly because so many others are
involved in similar schemes and don't want to get caught either.
I really don't get it how she became a poster child or garnished so much support. Her story is suspicious from the very start. I
don't believe that she was naive or "clueless," nor is she a moron, nor is she a seller without much experience. None of those excuses provide sufficient reason for what she claims she did.
Evidently, she believes that if she gains enough support, she will not only get "her money" back, she will also not be charged for
federal crimes?
I also do not like the message being given out, "It could happen to you, too!" That's total BS. What happened to her could
only happen to you if you did what she admitted to doing: Accept credit-card payments for non-transactions and keep a
commission for forwarding the cash to a total stranger.
The first clue that something was wrong was (as she stated) that she sold a $1,500.00 ring to someone who promptly wanted a
refund. That person sent her $1,500.00 by credit card payment and then she gave that person the $1,500.00 back in cash?
My suspicious nature has a lot of warning bells and flags on that one!
As I posted early in this thread, be aware that you are only allowed to ship to the credit-card billing address of the payee, and
PayPal does not provide its services outside the USA at present. Protect yourself and do not ship to any address except the
one that the credit-card company or service provides. Do not engage in cash-back transactions while using credit cards or
credit-card-payment services.
Bottom line: If you're not doing what this woman claims she did, what happened to her will not happen to you.
In other words, don't break the rules and don't break the laws.
posted on October 8, 2000 12:41:15 PM"I really don't get it how she became a poster child or garnished so much support. Her story is suspicious from the very start."
I think I have the answer to that. If she's a poor innocent victim then PayPal is the nasty old villian. If she had done the same thing with a merchant account from a bank there would have been a few laughs and that would have been the end of the story.
posted on October 8, 2000 12:50:36 PM
"As I posted early in this thread, be aware that you are only allowed to ship to the credit-card billing address of the payee, and PayPal does not provide its services outside the USA at present. Protect yourself and do not ship to any address except the
one that the credit-card company or service provides."
Ah, but PayPal doesn't provide the billing address of the person making the payment. It lets the payee fill in any old address they want to fill in. Several people on this board have been asking PayPal for weeks to provide the actual billing address of the user. CCNow does it. Amazon does it. Billpoint does it.
PayPal does NOT.
It's another reason that any seller can fall victim to credit card fraud by accepting PayPal payments, even if you play strictly by ALL of the rules. All it takes is a criminal on the other end of the transaction.
Does your phone ever ring and you pick it up to hear "Congratulations! You've just won a free (insert whatever... car, trip, dinner, etc.) and I just need to get a little information from you so you can claim your prize!" I get them in the mail, on the phone, in email, all the time. I tell them no. I tell every single one of them 'NO'. I'll bet you do too.
But someone is saying 'OK'.
Do you ever buy lottery tickets? Do you know people who do? Do you know the odds? The lottery is a tax on stupidity, but it's also the cheapest dream you can buy. You can spend a buck and dream about being RICH for a few days. Then it's back to reality.
Have you ever signed up for a pyramid or multi-level marketing scheme? Maybe not, I wouldn't ever do it, but plenty of people do!
Ever fallen victim to a con or a scam?
Ever put a nickel in a slot machine and pulled the handle? Ever been to Vegas? The odds are against you, but people go with the hope, with the belief that they will be winners! That something really GREAT will happen to them.
That's what causes people to do ALL of those things I listed above. Hope. And the more people's backs are against the wall, the more they need it, the more they hope and the more susceptible they are to being scammed or conned or taken advantage of.... Suspension of disbelief.
People have business partners who are embezzling from them, spouses who are cheating on them, all manner of things that if they were watching and paying attention and on their guard they would clearly see it, but they close their eyes to it because they want to believe that nothing really BAD is happening to them either.
